by Lance Roberts, Clarity Financial
This is THE QUESTION for investors. Here are a few articles from the past couple of days:
- Here’s A Few Reasons It Might Be A Good Time To Buy – Motley Fool
- Time To Start Bottom Fishing – RBC
- 6-Signals Say A Bottom Is In – CNBC
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And then you have clueless economists, like Brian Wesbury from First Trust, who have never seen a “bear market,” or “recession,” until it’s over.
March 6th.
Why is this important? Because “bear markets don’t bottom with optimism, they end with despair.”
As I wrote last week:
“Bob Farrell, a legendary investor, is famous for his 10-Investment Rules to follow.
Bear markets have three stages – sharp down, reflexive rebound and a drawn-out fundamental downtrend – Rule #8
- Bear markets often START with a sharp and swift decline.
- After this decline, there is an oversold bounce that retraces a portion of that decline.
- The longer-term decline then continues, at a slower and more grinding pace, as the fundamentals deteriorate.
Dow Theory also suggests that bear markets consist of three down legs with reflexive rebounds in between.
The chart above shows the stages of the last two primary cyclical bear markets versus today (the 2020 scale has been adjusted to match.)
The answer to the question is simply this:
“When is it time to start buying the market? When you do NOT want to.”
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